Exam 2: Review of Probability

The accompanying table shows the joint distribution between the change of the unemployment rate in an election year and the share of the candidate of the incumbent party since 1928.You think of this data as a population which you want to describe, rather than a sample from which you want to infer behavior of a larger population. Joint Distribution of Unemployment Rate Change and Incumbent Party's Vote Share in Total Vote Cast for the Two Major-Party Candidates, 1928-2000 ( Incumbent -50\%)>0 (Y=0) Incumbent -50\%)\leq0 (Y=1) Total \Deltau>0(X=0) 0.053 0.211 0.264 \Deltau\leq0(X=1) 0.579 0.157 0.736 Total 0.632 0.368 1.00 (a)Compute and interpret E()Y and E()X .

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